SEC Likely to Approve Spot Bitcoin ETF in Next Few Months: JPMorgan
Bitcoin (BTC) has gained this week due to increased optimism about the potential approval of multiple spot bitcoin exchange-traded-funds (ETFs), JPMorgan (JPM) said in a research report Wednesday.
The Securities and Exchange Commission’s (SEC) decision not to appeal a recent ruling in the Grayscale case brings the approval of the applications closer, the report said. Grayscale is the manager of the Grayscale Bitcoin Trust (GBTC), the largest cryptocurrency fund in the world.
Timing of an approval is unclear, but should happen within months, and probably before Jan. 10, the final deadline for the Ark 21Shares applications, analysts led by Nikolaos Panigirtzoglou wrote.
ETFs are traded on an exchange, like stocks, and track the performance of an underlying asset. They are popular because they allow investors to gain access to cryptocurrencies without having to purchase the underlying digital assets themselves. They are also cheaper to trade. The crypto market is hopeful that the approval of a spot bitcoin ETF will lead to a flood of mainstream money into the sector.
The bank reiterated its view that the regulator was likely to approve multiple applications at once rather than grant a “first mover advantage” to any single applicant.
JPMorgan said such a move could be beneficial for investors as it would encourage competition in regards to ETF fees.
“Grayscale will likely face greater pressure to lower fees if the trust gets approval to be converted into an ETF,” the report said.
CoinDesk’s parent company, Digital Currency Group, also owns Grayscale.